Date of publication: 26-03-2013
Inflation here jumped on an eight-month high last month, caused mainly by a spike in the certificate of entitlement (COE) prices.
Inflation rose by 4.9% last month from a year earlier, said a sharp jump from January's 3.6 percent, the monetary authority of Singapore (MAS), Department of trade and industry (MTI) yesterday.
This was the highest year-on-year rise since the 5.3 percent in June last year.
Cost of private road transport, powered by rising prices COE, rose 17.4% last month. This well alone for more than two-thirds of the 1.3 percentage point increase overall inflation last month, famous MAS and MTI.
DBS Economist Irvin Seah said, "the COE premiums on average were about 25 percent higher than they were back in the same period last year."
Most economists tip headline inflation to ease in coming months, as COE premiums continue to weaken due to curbs on auto loans introduced late last month.
Deputy Prime Minister and Minister for finance Tharman Shanmugaratnam told Parliament in his budget recently round-up speech that the rebellions were necessary to keep a lid on inflationary pressures and rein in borrowing by car buyers.
CIMB Economist song Seng Wun said: "the good news is that February inflation probably the peak for this year."
UOB Economist Francis Tan said: "the delayed effects of slower economic growth over the past few quarters in Singapore can further alleviate price pressure."
But MAS and MTI warned that the continuing tight job market will result in wage increases this year, some of which will be passed on to consumers through higher prices.
Singapore Business Federation chief operating officer Victor Tay said: "the No. 1 concern has increased operating costs, such as the cost of rental and manpower. We expect costs of transport to moderate, given the recent measures of the budget. "
MAS and MTI added that core inflation, that accommodation costs and private road transport prices, rose to 1.9 percent last month from 1.2% in January.
Another measure of inflation-the consumer price index less imputed rental on owner-occupied accommodation-rose 4.6 percent, due to higher cost of private road transport.
Food cost inflation was higher at 2.3 percent, to by January of 1 percent as Chinese new year fell in February.
But the rise in the cost of accommodation to 5.9 percent compared with the 6.1 percent last month alleviated if market rents saw a slightly lower increase.
MAS and MTI held this year full-year inflation estimated at 3.5 percent to 4.5 percent.
MAS is tipped to maintain a policy that a modest and gradual appreciation of the Singapore dollar on next month's policy meeting.
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